Can I Get A Mortgage Loan If I Have Credit Card Debt?
It’s certainly possible to get a home mortgage debt consolidation loan if you have existing credit card debt – in fact, that’s the way many consumers choose to consolidate and clear their debt.
The question is not if you can get the loan, but if it makes sense for your individual situation. Moreover, while credit card debt itself may not block you from getting a mortgage refinance loan, poor credit incurred through that debt may result in you not qualifying for a loan, or qualifying for one with less favorable terms and conditions.
You should also consider whether your credit card debt skews your debt-to-income ratio to the point where it will be difficult or impossible for you to be approved for a loan. Your debt-to-income ratio is the amount of your monthly earnings that go toward paying down debt. Lenders look at this as a major indicator of whether you’ll be able to repay your mortgage debt consolidation loan, since an already steep ratio indicates that you may already be overextended and cannot handle another monthly payment.
What About Equity And Credit Scores?
With funds less available than in the heady days of a good national economy, lenders are more reluctant to make loans than in the past. This means that you should have at least 20 percent equity in your home in order to get a mortgage refinance to pay down debt. If you have no equity built up in your home, you will likely not be able to get a loan.
Credit scores are equally crucial when it comes to loan approval. While in the past you might have been able to get a mortgage refinance with credit scores as low as 500, that is far from the case these days. You will be most likely to get a loan with favorable terms and conditions if your score is in the range between 850 and 720, while a score between 720 and 620 will probably obtain you a loan, but likely not with optimal terms. A score less than 620 may still allow you to get a loan, but at this point you will probably be dealing with subprime terms and conditions, meaning that you will pay more over the lifetime of the loan with less favorable terms.
Thursday, March 11, 2010
Can I Get A Mortgage Loan If I Have Credit Card Debt?
Can I Get A Mortgage Loan If I Have Credit Card Debt?
It’s certainly possible to get a home mortgage debt consolidation loan if you have existing credit card debt – in fact, that’s the way many consumers choose to consolidate and clear their debt.
The question is not if you can get the loan, but if it makes sense for your individual situation. Moreover, while credit card debt itself may not block you from getting a mortgage refinance loan, poor credit incurred through that debt may result in you not qualifying for a loan, or qualifying for one with less favorable terms and conditions.
You should also consider whether your credit card debt skews your debt-to-income ratio to the point where it will be difficult or impossible for you to be approved for a loan. Your debt-to-income ratio is the amount of your monthly earnings that go toward paying down debt. Lenders look at this as a major indicator of whether you’ll be able to repay your mortgage debt consolidation loan, since an already steep ratio indicates that you may already be overextended and cannot handle another monthly payment.
What About Equity And Credit Scores?
With funds less available than in the heady days of a good national economy, lenders are more reluctant to make loans than in the past. This means that you should have at least 20 percent equity in your home in order to get a mortgage refinance to pay down debt. If you have no equity built up in your home, you will likely not be able to get a loan.
Credit scores are equally crucial when it comes to loan approval. While in the past you might have been able to get a mortgage refinance with credit scores as low as 500, that is far from the case these days. You will be most likely to get a loan with favorable terms and conditions if your score is in the range between 850 and 720, while a score between 720 and 620 will probably obtain you a loan, but likely not with optimal terms. A score less than 620 may still allow you to get a loan, but at this point you will probably be dealing with subprime terms and conditions, meaning that you will pay more over the lifetime of the loan with less favorable terms.
It’s certainly possible to get a home mortgage debt consolidation loan if you have existing credit card debt – in fact, that’s the way many consumers choose to consolidate and clear their debt.
The question is not if you can get the loan, but if it makes sense for your individual situation. Moreover, while credit card debt itself may not block you from getting a mortgage refinance loan, poor credit incurred through that debt may result in you not qualifying for a loan, or qualifying for one with less favorable terms and conditions.
You should also consider whether your credit card debt skews your debt-to-income ratio to the point where it will be difficult or impossible for you to be approved for a loan. Your debt-to-income ratio is the amount of your monthly earnings that go toward paying down debt. Lenders look at this as a major indicator of whether you’ll be able to repay your mortgage debt consolidation loan, since an already steep ratio indicates that you may already be overextended and cannot handle another monthly payment.
What About Equity And Credit Scores?
With funds less available than in the heady days of a good national economy, lenders are more reluctant to make loans than in the past. This means that you should have at least 20 percent equity in your home in order to get a mortgage refinance to pay down debt. If you have no equity built up in your home, you will likely not be able to get a loan.
Credit scores are equally crucial when it comes to loan approval. While in the past you might have been able to get a mortgage refinance with credit scores as low as 500, that is far from the case these days. You will be most likely to get a loan with favorable terms and conditions if your score is in the range between 850 and 720, while a score between 720 and 620 will probably obtain you a loan, but likely not with optimal terms. A score less than 620 may still allow you to get a loan, but at this point you will probably be dealing with subprime terms and conditions, meaning that you will pay more over the lifetime of the loan with less favorable terms.
cont
the advantage of these loans is the ability to tap the value in your home to consolidate and eliminate debt. However, when considering a home mortgage debt consolidation loan, remember that you’re putting your house up as collateral – and if you neglect to repay the loan, you run the risk of losing that home.
cont
the advantage of these loans is the ability to tap the value in your home to consolidate and eliminate debt. However, when considering a home mortgage debt consolidation loan, remember that you’re putting your house up as collateral – and if you neglect to repay the loan, you run the risk of losing that home.
What Is A Home Mortgage Debt Consolidation Loan?
Also known as a mortgage refinance, a home mortgage debt consolidation loan is essentially a new loan on your home that allows you to use your home’s equity to pay off debt. This can be done either as a traditional loan or as a line of credit known as a home equity loan.
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